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Maintaining a Drupal site, or a collection of sites is much easier if everything is kept completely separate--Drupal core, contributed modules, and the site itself.
This is even more important if multiple sites are hosted on the same server. Drupal's own multi-site support can be a nightmare to maintain, believe me! (e.g. when you want to upgrade modules or core).
A must simpler and easily supported configuration is to keep everything separate and to use symbolic links to tie it all together. For example, I keep:

Drup.org exists as a place for me to document the things that I have learned while building dynamic websites and hosting platforms.
My business website, writeup.org may be found at: Drupal websites. Below are some of the sites that I have built: